Good morning. Editor Nicole MacAdam (@nicole_mac1) here. New rules for airlines are introduced in Ottawa, the cost of medical pot for veterans had soared before a recent crackdown, and documents related to Trump’s KXL approval show his appreciation for Canadian oil — despite NAFTA posturing. Enjoy your Wednesday!

Ottawa unveiled legislation that will spell out exactly what rights airline passengers have and ensure that people who purchase flight tickets cannot be forced off due to overbooking, reports Alicja Siekierska. This comes a month after video footage went viral showing a passenger being dragged off a United Airlines flight after he refused to leave his seat to accommodate crew members. The proposed bill, tabled by Transportation Minister Marc Garneau, will also relax ownership requirements for Canadian air carriers and Canadian National Railway Co. (CN) and introduce new rules about joint ventures for airlines. “Overall, we view the announcement as a mild negative for railroads and a neutral to possibly net positive for airlines,” said RCB Dominion Securities analyst Walter Spracklin in a note to clients. Click here for five more things you need to know about the proposed legislation.

Veterans Affairs paid out $44.5 million for medical marijuana expenses in the year before the government cracked down on soaring reimbursement costs, reports Sunny Freeman, more than three times what it covered in the prior two years combined. The department covered 3.7 million grams of marijuana at an average cost of $12.01 per gram from October 2015 to September 2016 — 30 per cent higher than what it considers market value. The cost breakdown was included in documents released under an access to information request ahead of a Veterans Affairs policy change this month that will significantly reduce the amount of medical marijuana eligible for reimbursement. The move is part of an effort to curtail government spending on skyrocketing medical marijuana costs as the number of ex-soldiers claiming medical marijuana expenses rises rapidly.

As part of posturing to extract better terms on NAFTA, President Donald Trump has warned Canada he’s unhappy with many aspects of the deal, including — and surprisingly — energy. But a document by the U.S. State Department on the reasons behind his approval of the Keystone XL pipeline tells a different story, writes Claudia Cattaneo, it shows deep appreciation for Canadian oil and for the friendship between the two countries. “A more robust statement (by the U.S.) of the importance of oil from Canada you will seldom see,” said former Canadian ambassador to the United States Derek Burney, who has argued that Canadian energy has become so important to its southern neighbour it should be used as a trump card in the renegotiation of the North American Free Trade Agreement.

The Swedish and New Zealand housing markets are the most at risk of a correction among the so-called G-10 economies, according to Goldman Sachs, but Canada isn’t far behind. In a report on house prices in G-10 nations — those with the 10 most-traded currencies in the world — Goldman finds they are most elevated in small, open economies such as Sweden and New Zealand. The investment bank said there is a 35-40 per cent chance of a housing “bust” in each country over the next two years, which it defines as house prices falling five per cent or more after adjustment for inflation. Goldman compares house-price levels across economies using three standard metrics: the ratio of house prices to rent, the ratio of house prices to household income and house prices adjusted for inflation. “Using an average of these measures, house prices in New Zealand appear the most over-valued, followed by Canada, Sweden, Australia and Norway,” it said.

Pieridae Energy is looking for more deals after going public through a reverse takeover of Quebec City’s Petrolia, reports Geoffrey Morgan. “We wanted to do a reverse takeover that added value to our story,” Pieridae CEO Alfred Sorensen said after announcing his privately held company would buy Petrolia, which has a $17-million market cap. Sorensen said he was also looking to raise between $200 to $300 million to buy other gas producers, either in Western Canada or in the Marcellus gas formation in Pennsylvania to source natural gas for Pieridae’s proposed US$7-billion Goldboro LNG project in Nova Scotia. Petrolia’s executive chairman Myron Tetreault said his company was “very excited” about the merger and the creation of an integrated, publicly traded LNG company in Canada, and said there could be more deals in Quebec. “We think there’s an opportunity for some consolidation,” he said.